What kind of company do you think Xiaomi is, some people say that Xiaomi is an Internet company, and some people say that it is a hardware company. So, what's the difference between these two?
In fact, if you want to really understand a company, you only need to know what it makes money on. Xiaomi's revenue is mainly divided into three segments, namely mobile phones, smart hardware and Internet services.
First of all, let's talk about the well-known mobile phone business.
In 2010, Xiaomi was founded, and in August of the same year, the first product - MIUI was released. In 2011, Xiaomi officially released its first mobile phone, Xiaomi 1, so that ordinary people can also afford to buy smartphones. As soon as the Redmi mobile phone was released in 2013, it made the cottage machine on the rotten street disappear.
The mobile phone business has always been the most core business of Xiaomi, but at the same time it is also the least profitable business of Xiaomi. That is, "If you don't make money, make a friend.".
To put it simply, if Xiaomi wants to improve the hardware profit of mobile phones, then the sales of Xiaomi mobile phones will not sell third in the world, and it will not be able to get the users that Xiaomi wants most. Then, Lei Jun's dream of making money from Internet services cannot be realized.
However, things are not so simple. Because Zhao Ming, president of Honor, has also said that there are very few hardware companies in China that can achieve a net profit margin of 5% for comprehensive hardware.
Next, let's talk about Xiaomi's smart hardware.
I don't know when to start, our lives have been filled with a variety of millet products, millet charging treasure, millet vacuum cleaner, refrigerator, air conditioner, doorbell, smart speaker and so on.
Many people don't know that these products are really developed by Xiaomi only routers, TVs, audio, and others are produced by companies invested by Xiaomi. Xiaomi has incorporated these into the Xiaomi ecological chain, do you think these companies have made a lot of money for Xiaomi?
No, these hardware, like mobile phones, still did not help Xiaomi make much money. So why does Xiaomi spend so much effort to do it? However, this is where Xiaomi's cleverness lies.
When all mobile phones can only chat, brush videos, play games, Xiaomi mobile phones can control your TV, rice cooker, curtains, desk lamps, air purifiers and all other smart devices, so will you buy other brands of mobile phones?
According to Xiaomi's financial report, users who have only used Xiaomi smart hardware once increased the number of device connections by more than 25% in the following year. Simply put, people who have used it want to use it again later.
Selling mobile phones does not make money to sell peripheral hardware, and selling peripheral hardware does not make money, so do something different. Or what does Xiaomi rely on to complete the small goal of 100 billion?
Finally, let's talk about Xiaomi's Internet service.
Lei Jun has been saying that Xiaomi is an Internet company that often advertises its fair price and attentive service, and does not want to make money on mobile phones. But the second half of what Lei Jun did not say is that Xiaomi wants to make money by the service behind the mobile phone. That's right, internet service!
Xiaomi's Internet business basically includes six categories: software store downloads, advertising revenue, game sharing and pre-installed APPS, e-commerce sharing and financial services.
Like the previous four are easier to do, but these upper limits are too low. For a simple example, your phone can only put so many advertising positions, and more users will be particularly disgusted. If you are disgusted and may not use Xiaomi mobile phones again, then you will never be able to advertise.
The achievements of e-commerce are more complicated, and it requires a lot of investment in manpower and material resources to do a good job. Like some others, although it is also very profitable, such as Xiaomi Finance, but the risk is relatively large, so Xiaomi is more cautious and has not been let go at present.
In fact, all the revenue sources of Xiaomi are every user who uses Xiaomi mobile phones and Xiaomi smart devices, for Xiaomi, constantly do their own hardware products, constantly make products that make everyone satisfied, and increase their own users is the most important!
Therefore, Xiaomi wants to become an Internet company recognized by the public, and there is still a long way to go!